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Gold Prices Rise on ECB's Draghi, Jobless Claims (Update 1)

NEW YORK (
TheStreet) --
Gold prices
were higher Thursday as weekly jobless claims rose 4,000 and as European Central Bank President Mario Draghi said the central bank was prepared to buy government bonds.

Gold for December delivery rose $16.70 to close at $1,796.50 an ounce at the Comex division of the New York Mercantile Exchange. The
gold price
traded as high as $1,797.20 and as low as $1,779.90 an ounce, while the spot price was rising $11.10, according to Kitco's gold index.

"ECB no action, jobless claims up 4,000. Not exactly the catalysts for a near 1% jump, but the bulls declare $1800 gold as being in the bag," wrote Jon Nadler, a senior analyst at Kitco metals.

Initial jobless claims increased 4,000 to 367,000 for the week ending Sept. 29. The number came a day ahead of the monthly unemployment number, which for months greatly has affected gold prices. With the
Federal Reserve's implementation of open-ended quantitative easing, though, that unemployment number may have less luster for investors in the yellow metal.

Silver prices
for December delivery settled up 41 cents at $35.10 an ounce, while the
U.S. dollar index
was plummeting 0.70% to $79.35.

Draghi said Thursday that the ECB would be prepared to buy government bonds when countries -- such as Spain and Greece -- meet the proper conditions to receive that assistance. More easing from Europe would be a positive for gold prices, as it would suggest more inflation in the area.

The Bank of England and ECB both opted on Thursday to keep interest rates unchanged.

Gold analysts have suggested in the recent rally that $1,800 an ounce would be the upper level of resistance, but the break through that level may not be far off.

"Bank of England rate decision of low rates and continued low rates here are also helpful to those needing gold to maintain purchasing power. We now approach the 1800 area which we look at as resistance and possible breakout if we close above," wrote George Gero, precious metals strategist at RBC Wealth Management.

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